FBI arrests two from investment firm sued by Pitt, CMU
A pair of investment managers who allegedly bilked the University of Pittsburgh and Carnegie Mellon University out of $114 million were arrested in New York, the FBI said today.
Paul Greenwood and Stephen Walsh, principals of WG Trading Co., were to appear in federal court in Manhattan. They are the fund managers and principals of affiliate Westridge Capital Management, based in Santa Barbara, Calif.
Pitt has invested more than $65 million with Westridge since 2002, and Carnegie Mellon has invested more than $49 million since April, 2008, according to a lawsuit filed Friday.
The two schools' lawsuit asked the U.S. District Court for Western Pennsylvania to order Westridge Capital Management Inc. to open its records and repay the money. They became concerned about their investments after the National Futures Association, a regulator based in Chicago, began auditing Walsh and Greenwood in early February.
The lawsuit said Greenwood and Walsh had "converted investor funds for their own use," loaning money from Westridge to other entities they controlled or owned. The universities seek the immediate return of the $114 million they had entrusted with the money managers.
U.S. District Court Judge Terrence McVerry issued a restraining order freezing Westridge's accounts; prohibiting its managers from collecting any pay or destroying any records; and ordering them to provide copies of their business records to the schools by March 2. A hearing on the order was scheduled for March 5.
The Associated Press contributed to this report.